While the Fed doesn’t regulate your mortgage rate, the central bank sets the funds rate to impact the economy. This action indirectly influences the loan rates consumers pay. The Fed kept the key rate near zero during its last meeting, with no forecasted rate hikes through 2023.

Related: Dave Ramsey explains how your mortgage is key to early retirement. If Kamala Harris wins, mortgage rates are expected to stabilize or even fall due to her proposed home-b

In September 2024, Jerome Powell announced the first Federal Funds Rate cut in over four years. The Federal Funds Rate is a short-term rate related to the cost of debt in the American economy. Some expected the Federal Reserve to cut only 25 basis points,

The coronavirus has wreaked havoc on the economy, and in an emergency response, the Federal Reserve slashed interest rates by a full percentage point—the second rate cut in two weeks and the largest in Fed history.

On September 18, the Federal Reserve kicked off the cutting cycle by reducing overnight rates by 50 basis points. Since then, mortgage rates have gone higher. This is not obviously an intuitive thing to happen.

The Fed announced first rate cut in a long time last month, but the mortgage rates have continued to rise. Why is this? Here's why.

Mortgage rates are increasing in recent weeks despite the Federal Reserve's decision to cut interest rates last month for the first time in four years.